DT Dynatrace Inc

Exceeds high end of guidance across all metrics

Delivers ARR growth of 19% year-over-year on a constant currency basis

Achieves GAAP Operating Margin of 11% and Non-GAAP Operating Margin of 31%

Dynatrace (NYSE: DT) today announced financial results for the second quarter of fiscal 2025 ended September 30, 2024.

"Our continued out-performance across all of our key metrics is a result of the strength of our platform and ability to execute effectively in a dynamic market," said Rick McConnell, Chief Executive Officer of Dynatrace. "The world relies on software, and the largest and most complex global enterprises come to Dynatrace to make their businesses more reliable and resilient. By leveraging our AI-powered observability platform, these organizations gain deep insights, automate operations, and optimize performance at scale."

Second Quarter Fiscal 2025 Financial and Other Recent Business Highlights:

All growth rates are compared to the second quarter of fiscal 2024, unless otherwise noted.

Financial Highlights:

• ARR of $1,617 million, an increase of 20%, or 19% on a constant currency basis
• Total Revenue of $418 million, an increase of 19% on both an as reported and constant currency basis
• Subscription Revenue of $400 million, an increase of 20% on both an as reported and constant currency basis
• GAAP Income from Operations of $47 million and Non-GAAP Income from Operations of $131 million
• GAAP EPS of $0.15 and Non-GAAP EPS of $0.37, both on a dilutive basis

Business Highlights:

• Industry recognition: Dynatrace received the following recognitions by third-party industry analysts:
  • Positioned furthest for Completeness of Vision and highest in Ability to Execute in the 2024 Gartner® Magic Quadrant™ for Observability Platforms. This is the 14th consecutive time that Gartner has named Dynatrace a Leader in this report.1
  • Ranked #1 across 3 of 5 use cases in the 2024 Gartner Critical Capabilities for Observability Platforms Report.2
  • Named a Leader in the Inaugural 2024 Gartner Magic Quadrant for Digital Experience Monitoring for Completeness of Vision and Ability to Execute.3
  • Recognized in the 2024 Constellation Research ShortLists™ for Observability, AIOPs, and Digital Performance Management.4
• Product advancements: Dynatrace announced improved user experience, advanced log management and analytics, and extended cloud-native capabilities that enable customers to gain deeper visibility, boost operational efficiency, and drive productivity across their business.
• Go-to-market engagement: Dynatrace increased customer engagement with several events in the quarter, including more than 2,000 customers and partners attending the company's global Innovate sessions and more than 400 partners at the company's inaugural PowerUp program. In addition, Dynatrace hosted its most successful streaming event to date, "Power of Possible," showcasing how the company is extending customer value to more use cases and teams.

Share Repurchase Program

• During the second quarter, Dynatrace spent $40 million to repurchase 835,000 shares at an average price of $47.90 under its $500 million share repurchase program. From the inception of the program in May 2024 through September 30, 2024, Dynatrace has repurchased 1.9 million shares for $90 million at an average price of $46.71.

Second Quarter 2025 Financial Highlights

(Unaudited – In thousands, except per share data)

 

 

Three Months Ended September 30,

 

 

2024

 

 

 

2023

 

Key Operating Metric:

 

 

 

Annual recurring revenue (ARR)

$

1,616,531

 

 

$

1,343,530

 

Year-over-Year Increase

 

20

%

 

 

Year-over-Year Increase - constant currency (*)

 

19

%

 

 

 

 

 

 

Revenue:

 

 

 

Total revenue

$

418,129

 

 

$

351,700

 

Year-over-Year Increase

 

19

%

 

 

Year-over-Year Increase - constant currency (*)

 

19

%

 

 

 

 

 

 

Subscription revenue

$

399,810

 

 

$

334,497

 

Year-over-Year Increase

 

20

%

 

 

Year-over-Year Increase - constant currency (*)

 

20

%

 

 

 

 

 

 

GAAP Financial Measures:

 

 

 

GAAP income from operations

$

47,026

 

 

$

35,269

 

GAAP operating margin

 

11

%

 

 

10

%

 

 

 

 

GAAP net income

$

44,008

 

 

$

35,809

 

 

 

 

 

GAAP net income per share - diluted

$

0.15

 

 

$

0.12

 

 

 

 

 

GAAP shares outstanding - diluted

 

301,373

 

 

 

297,794

 

 

 

 

 

Net cash provided by operating activities

$

23,650

 

 

$

36,877

 

 

 

 

 

Non-GAAP Financial Measures (*):

 

 

 

Non-GAAP income from operations

$

130,669

 

 

$

106,435

 

Non-GAAP operating margin

 

31

%

 

 

30

%

 

 

 

 

Non-GAAP net income

$

112,661

 

 

$

93,487

 

 

 

 

 

Non-GAAP net income per share - diluted

$

0.37

 

 

$

0.31

 

 

 

 

 

Non-GAAP shares outstanding - diluted

 

301,373

 

 

 

297,794

 

 

 

 

 

Free cash flow

$

20,138

 

 

$

34,127

 

 

* For additional information, please see the "Non-GAAP Financial Measures" and "Definitions - Non-GAAP and Other Metrics" sections of this press release.

Financial Outlook

Based on information available as of November 7, 2024, Dynatrace is issuing guidance for the third quarter and increasing its previous guidance for full year fiscal 2025 in the table below.

This guidance reflects foreign exchange rates as of October 31, 2024. We now expect foreign exchange to be a headwind of approximately $11 million on ARR and approximately $7 million on revenue for fiscal 2025 compared to ARR and revenue at constant currency. This guidance also excludes the impact of any share repurchases during the third and fourth quarter of fiscal 2025.

Growth rates for ARR, Total revenue, and Subscription revenue are presented in constant currency to provide better visibility into the underlying growth of the business.

All growth rates below are compared to the third quarter and full year of fiscal 2024.

(In millions, except per share data)

Q3 Fiscal 2025 Guidance

Total revenue

$425 - $428

As reported

16% - 17%

Constant currency

17% - 18%

Subscription revenue

$407 - $410

As reported

17% - 18%

Constant currency

17% - 18%

Non-GAAP income from operations

$117 - $120

Non-GAAP operating margin

27.5% - 28%

Non-GAAP net income

$98 - $101

Non-GAAP net income per diluted share

$0.32 - $0.33

Diluted weighted average shares outstanding

303 - 304

(In millions, except per share data)

Current Guidance

Fiscal 2025

 

Prior Guidance

Fiscal 2025*

 

Guidance Change

at Midpoint

ARR

$1,720 - $1,735

 

$1,720 - $1,735

 

$—

As reported

14% - 15%

 

14% - 15%

 

—

Constant currency

15% - 16%

 

15% - 16%

 

—

Total revenue

$1,665 - $1,675

 

$1,644 - $1,658

 

$19

As reported

16% - 17%

 

15% - 16%

 

100 bps

Constant currency

17% - 18%

 

16% - 17%

 

100 bps

Subscription revenue

$1,590 - $1,600

 

$1,571 - $1,585

 

$17

As reported

17% - 18%

 

16% - 17%

 

100 bps

Constant currency

17% - 18%

 

16% - 17%

 

100 bps

Non-GAAP income from operations

$466 - $474

 

$459 - $467

 

$7

Non-GAAP operating margin

28% - 28.25%

 

28%

 

12 bps

Non-GAAP net income

$396 - $404

 

$383 - $392

 

$13

Non-GAAP net income per diluted share

$1.31 - $1.33

 

$1.26 - $1.29

 

$0.04

Diluted weighted average shares outstanding

303 - 305

 

303 - 305

 

—

Free cash flow

$393 - $404

 

$386 - $398

 

$7

Free cash flow margin

23.5% - 24%

 

23.5% - 24%

 

—

*Prior guidance was issued on August 7, 2024.

Conference Call and Webcast Information

Dynatrace will host a conference call and live webcast to discuss its results and business outlook for investors and analysts at 8:00 a.m. Eastern Time today, November 7, 2024. To access the conference call from the U.S. and Canada, dial (866) 405-1247, or internationally, dial (201) 689-8045 with conference ID# 13749514. The call will also be available live via webcast on the company’s website, ir.dynatrace.com.

An audio replay of the call will also be available until 11:59 p.m. Eastern Time on February 5, 2025, by dialing (877) 660-6853 from the U.S. and Canada, or for international callers by dialing (201) 612-7415 and entering conference ID# 13749514. In addition, an archived webcast will be available at ir.dynatrace.com.

We announce material financial information to our investors using our Investor Relations website, press releases, SEC filings and public conference calls and webcasts. We also use these channels to disclose information about the company, our planned financial and other announcements, attendance at upcoming investor and industry conferences, and for complying with our disclosure obligations under Regulation FD.

Non-GAAP Financial Measures

In addition to disclosing financial measures prepared in accordance with GAAP, this press release and the accompanying tables contain certain non-GAAP financial measures as defined by Regulation G, including non-GAAP income from operations, non-GAAP operating margin, non-GAAP net income, non-GAAP net income per diluted share, and free cash flow. We also use or discuss non-GAAP financial measures in conference calls, slide presentations and webcasts.

We use these non-GAAP financial measures for financial and operational decision-making purposes, and as a means to evaluate period-to-period comparisons and liquidity. We believe that these non-GAAP financial measures provide useful information about our operating results, enhance the overall understanding of past financial performance and allow for greater transparency with respect to metrics used by our management in its financial and operational decision-making.

The presentation of the non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Our non-GAAP financial measures may not provide information that is directly comparable to similarly titled metrics provided by other companies.

Non-GAAP financial measures are defined in this press release and the tables included in this press release include reconciliations of historical non-GAAP financial measures to their most directly comparable GAAP measures.

We also include non-GAAP financial measures in our financial outlook included in this press release. Reconciliations of forward-looking non-GAAP income from operations, non-GAAP net income, non-GAAP net income per diluted share, and free cash flow guidance to the most directly comparable GAAP measures are not available without unreasonable efforts due to the high variability, complexity, and low visibility with respect to the charges excluded from these non-GAAP measures; in particular, the measures and effects of share-based compensation expense, employer taxes and tax deductions specific to equity compensation awards that are directly impacted by future hiring, turnover and retention needs, as well as unpredictable fluctuations in our stock price. We expect the variability of the above charges to have a significant, and potentially unpredictable, impact on our future GAAP financial results.

Definitions - Non-GAAP and Other Metrics

Annual Recurring Revenue (ARR) is defined as the daily revenue of all subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our calculation of ARR any revenues derived from month-to-month agreements and/or product usage overage billings.

Constant Currency amounts for ARR, Total Revenue and Subscription Revenue are presented to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign exchange rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year.

Non-GAAP Income from Operations is defined as GAAP income from operations adjusted for the following items: share-based compensation; employer payroll taxes on employee stock transactions; amortization of intangibles; transaction, restructuring and other non-recurring or unusual items that may arise from time to time. The related margin is non-GAAP income from operations expressed as a percentage of total revenue.

Non-GAAP Net Income is defined as GAAP net income adjusted for the following items: income tax expense/benefit; non-GAAP effective cash taxes; net interest expense and income; net cash received from and paid for interest; share-based compensation; employer payroll taxes on employee stock transactions, amortization of intangibles; gains and losses on currency translation; and transaction, restructuring and other non-recurring or unusual items that may arise from time to time. Non-GAAP net income per diluted share is calculated as non-GAAP net income divided by the diluted weighted average shares outstanding used to compute GAAP net income per diluted share.

Free Cash Flow is defined as the net cash provided by or used in operating activities less capital expenditures, reflected as purchase of property and equipment and capitalized software additions in our financial statements. The related margin is free cash flow expressed as a percentage of total revenue.

About Dynatrace

Dynatrace exists to make the world's software work perfectly. Our end-to-end platform combines broad and deep observability and continuous runtime application security with Davis® hypermodal AI to provide answers and intelligent automation from data at an enormous scale. This enables innovators to modernize and automate cloud operations, deliver software faster and more securely, and ensure flawless digital experiences. That's why the world's largest organizations trust the Dynatrace® platform to accelerate digital transformation.

Cautionary Language Concerning Forward-Looking Statements

This press release includes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to benefits that we believe organizations receive from using Dynatrace and our financial and business outlook, including our financial guidance for the third quarter and full year of fiscal 2025. These forward-looking statements include, but are not limited to, plans, objectives, expectations and intentions and other statements contained in this press release that are not historical facts and statements identified by words such as “will,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” or words of similar meaning. These forward-looking statements reflect our current views about our plans, intentions, expectations, strategies and prospects, which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions, expectations, strategies and prospects as reflected in or suggested by those forward-looking statements are reasonable, we can give no assurance that the plans, intentions, expectations or strategies will be attained or achieved. Furthermore, actual results may differ materially from those described in the forward-looking statements and will be affected by a variety of risks and factors that are beyond our control including, without limitation, our ability to maintain our revenue growth rates in future periods; market adoption of our product offerings; continued demand for, and spending on, our solutions; our ability to innovate and develop solutions that meet customer needs, including through Davis AI; the ability of our platform and solutions to effectively interoperate with customers’ IT infrastructures; our ability to acquire new customers and retain and expand our relationships with existing customers; our ability to expand our sales and marketing capabilities; our ability to compete; our ability to maintain successful relationships with partners; security breaches, other security incidents and any real or perceived errors, failures, defects or vulnerabilities in our solutions; our ability to protect our intellectual property; our ability to hire and retain necessary qualified employees to grow our business and expand our operations; our ability to successfully complete acquisitions and to integrate newly acquired businesses and offerings; the effect on our business of the macroeconomic environment, associated global economic conditions and geopolitical disruption; and other risks set forth under the caption “Risk Factors” in our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q, and our other SEC filings. We assume no obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

Gartner Disclaimers and Constellation Disclosures

1) Gartner, Magic Quadrant for Observability Platforms, Gregg Siegfried, Mrudula Bangera, Matt Crossley, Padraig Byrne, 12 August 2024. Dynatrace was recognized as Compuware from 2010-2014.

 

2) Gartner, Critical Capabilities for Observability Platforms, Mrudula Bangera, Padraig Byrne, Matt Crossley, Gregg Siegfried, 12 August 2024.

 

3) Gartner, Magic Quadrant for Digital Experience Monitoring, Padraig Byrne, Matt Crossley, DB Cummings, Martin Caren, Pankaj Prasad, 21 October 2024.

 

The Gartner content described herein (the “Gartner Content”) represents research opinion or viewpoints published, as part of a syndicated subscription service, by Gartner, Inc. ("Gartner"), and is not a representation of fact. Gartner Content speaks as of its original publication date (and not as of the date of this earnings press release), and the opinions expressed in the Gartner Content are subject to change without notice.

 

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally, and MAGIC QUADRANT is a registered trademark of Gartner, Inc. and/or its affiliates and are used herein with permission. All rights reserved.

 

4) 2024 Constellation Research ShortLists™ for Observability (Andy Thurai), AIOPs (Andy Thurai), and Digital Performance Management (R “Ray” Wang).

DYNATRACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited – In thousands, except per share data)

 

 

Three Months Ended September 30,

Six Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

2024

 

 

 

2023

 

Revenue:

 

 

 

 

 

 

Subscription

$

399,810

 

 

$

334,497

 

$

781,386

 

 

$

650,951

 

Service

 

18,319

 

 

 

17,203

 

 

35,963

 

 

 

33,635

 

Total revenue

 

418,129

 

 

 

351,700

 

 

817,349

 

 

 

684,586

 

Cost of revenue:

 

 

 

 

 

 

Cost of subscription

 

55,796

 

 

 

44,792

 

 

109,368

 

 

 

87,696

 

Cost of service

 

17,595

 

 

 

15,675

 

 

34,397

 

 

 

31,217

 

Amortization of acquired technology

 

4,393

 

 

 

3,900

 

 

8,772

 

 

 

7,798

 

Total cost of revenue

 

77,784

 

 

 

64,367

 

 

152,537

 

 

 

126,711

 

Gross profit

 

340,345

 

 

 

287,333

 

 

664,812

 

 

 

557,875

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

Research and development

 

95,366

 

 

 

74,084

 

 

182,944

 

 

 

140,366

 

Sales and marketing

 

144,224

 

 

 

127,605

 

 

289,330

 

 

 

252,722

 

General and administrative

 

48,953

 

 

 

44,748

 

 

93,931

 

 

 

83,843

 

Amortization of other intangibles

 

4,776

 

 

 

5,627

 

 

9,552

 

 

 

11,387

 

Total operating expenses

 

293,319

 

 

 

252,064

 

 

575,757

 

 

 

488,318

 

Income from operations

 

47,026

 

 

 

35,269

 

 

89,055

 

 

 

69,557

 

Interest income, net

 

12,850

 

 

 

8,509

 

 

25,625

 

 

 

15,655

 

Other expense, net

 

(2,038

)

 

 

(3,075

)

 

(4,073

)

 

 

(2,823

)

Income before income taxes

 

57,838

 

 

 

40,703

 

 

110,607

 

 

 

82,389

 

Income tax expense

 

(13,830

)

 

 

(4,894

)

 

(27,979

)

 

 

(8,392

)

Net income

$

44,008

 

 

$

35,809

 

$

82,628

 

 

$

73,997

 

Net income per share:

 

 

 

 

 

 

Basic

$

0.15

 

 

$

0.12

 

$

0.28

 

 

$

0.25

 

Diluted

$

0.15

 

 

$

0.12

 

$

0.27

 

 

$

0.25

 

Weighted average shares outstanding:

 

 

 

 

 

 

Basic

 

298,089

 

 

 

293,654

 

 

297,736

 

 

 

292,504

 

Diluted

 

301,373

 

 

 

297,794

 

 

301,714

 

 

 

297,492

 

UNAUDITED SHARE-BASED COMPENSATION

 

 

Three Months Ended September 30,

Six Months Ended September 30,

 

 

2024

 

 

 

2023

 

 

2024

 

 

 

2023

Cost of revenue

$

9,714

 

 

$

7,197

 

$

17,444

 

 

$

12,685

 

Research and development

 

26,607

 

 

 

18,177

 

 

48,187

 

 

 

31,441

 

Sales and marketing

 

20,750

 

 

 

18,877

 

 

36,772

 

 

 

32,876

 

General and administrative

 

14,632

 

 

 

13,707

 

 

26,957

 

 

 

21,474

 

Total share-based compensation

$

71,703

 

 

$

57,958

 

$

129,360

 

 

$

98,476

 

DYNATRACE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data)

 

 

September 30, 2024

 

March 31, 2024

 

(unaudited)

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

907,177

 

 

$

778,983

 

Short-term investments

 

97,834

 

 

 

57,891

 

Accounts receivable, net

 

303,341

 

 

 

602,739

 

Deferred commissions, current

 

106,554

 

 

 

98,935

 

Prepaid expenses and other current assets

 

68,672

 

 

 

66,749

 

Total current assets

 

1,483,578

 

 

 

1,605,297

 

Long-term investments

 

48,312

 

 

 

46,350

 

Property and equipment, net

 

52,649

 

 

 

53,325

 

Operating lease right-of-use assets, net

 

70,957

 

 

 

61,390

 

Goodwill

 

1,337,205

 

 

 

1,335,494

 

Intangible assets, net

 

31,701

 

 

 

50,995

 

Deferred tax assets, net

 

177,714

 

 

 

138,836

 

Deferred commissions, non-current

 

95,187

 

 

 

93,310

 

Other assets

 

32,350

 

 

 

24,782

Total assets

$

3,329,653

 

$

3,409,779

 

 

 

 

 

Liabilities and shareholders' equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

17,298

 

 

$

21,410

 

Accrued expenses, current

 

208,825

 

 

 

233,675

 

Deferred revenue, current

 

806,171

 

 

 

987,953

 

Operating lease liabilities, current

 

15,606

 

 

 

15,513

 

Total current liabilities

 

1,047,900

 

 

 

1,258,551

 

Deferred revenue, non-current

 

54,878

 

 

 

62,308

 

Accrued expenses, non-current

 

16,926

 

 

 

18,404

 

Operating lease liabilities, non-current

 

64,997

 

 

 

54,013

 

Deferred tax liabilities

 

996

 

 

 

1,013

 

Total liabilities

 

1,185,697

 

 

 

1,394,289

 

 

 

 

 

Shareholders' equity:

 

 

 

Common shares, $0.001 par value, 600,000,000 shares authorized, 298,519,163 and 296,962,547 shares issued and outstanding at September 30, 2024 and March 31, 2024, respectively

 

299

 

 

 

297

 

Additional paid-in capital

 

2,295,796

 

 

 

2,249,349

 

Accumulated deficit

 

(116,129

)

 

 

(198,757

)

Accumulated other comprehensive loss

 

(36,010

)

 

 

(35,399

)

Total shareholders' equity

 

2,143,956

 

 

 

2,015,490

Total liabilities and shareholders' equity

$

3,329,653

$

3,409,779

 

DYNATRACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited – In thousands)

 

 

Six Months Ended September 30,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net income

$

82,628

 

 

$

73,997

 

Adjustments to reconcile net income to cash provided by operations:

 

 

 

Depreciation

 

8,635

 

 

 

7,890

 

Amortization

 

19,356

 

 

 

19,207

 

Share-based compensation

 

129,360

 

 

 

98,476

 

Deferred income taxes

 

(39,059

)

 

 

(35,166

)

Other

 

3,133

 

 

 

3,019

 

Net change in operating assets and liabilities:

 

 

 

Accounts receivable

 

300,077

 

 

 

177,689

 

Deferred commissions

 

(7,166

)

 

 

8,978

 

Prepaid expenses and other assets

 

(14,073

)

 

 

(22,909

)

Accounts payable and accrued expenses

 

(30,479

)

 

 

(33,246

)

Operating leases, net

 

1,465

 

 

 

1,333

 

Deferred revenue

 

(199,486

)

 

 

(128,488

)

Net cash provided by operating activities

 

254,391

 

 

 

170,780

 

 

 

 

 

Cash flows from investing activities:

 

 

 

Purchase of property and equipment

 

(6,871

)

 

 

(13,017

)

Acquisition of a business, net of cash acquired

 

(100

)

 

 

(32,391

)

Purchases of investments

 

(80,024

)

 

 

—

 

Proceeds from sales and maturities of investments

 

40,375

 

 

 

—

 

Net cash used in investing activities

 

(46,620

)

 

 

(45,408

)

 

 

 

 

Cash flows from financing activities:

 

 

 

Payments of deferred consideration related to capitalized software additions

 

(1,656

)

 

 

—

 

Proceeds from employee stock purchase plan

 

10,389

 

 

 

9,584

 

Proceeds from exercise of stock options

 

8,773

 

 

 

16,619

 

Repurchases of common stock

 

(90,107

)

 

 

—

 

Taxes paid related to net share settlement of equity awards

 

(11,966

)

 

 

—

 

Net cash (used in) provided by financing activities

 

(84,567

)

 

 

26,203

 

 

 

 

 

Effect of exchange rates on cash and cash equivalents

 

4,990

 

 

 

(5,399

)

 

 

 

 

Net increase in cash and cash equivalents

 

128,194

 

 

 

146,176

 

 

 

 

 

Cash and cash equivalents, beginning of period

 

778,983

 

 

 

555,348

 

Cash and cash equivalents, end of period

$

907,177

 

 

$

701,524

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands, except percentages)

 

 

Three Months Ended September 30, 2024

 

GAAP

 

Share-based compensation

 

Employer payroll taxes on employee stock transactions

 

Amortization of intangibles

 

Transaction, restructuring, and other

 

Non-GAAP

Non-GAAP income from operations:

Cost of revenue

$

77,784

 

 

$

(9,714

)

 

$

(431

)

 

$

(4,393

)

 

$

—

 

 

$

63,246

 

Gross profit

 

340,345

 

 

 

9,714

 

 

 

431

 

 

 

4,393

 

 

 

—

 

 

354,883

 

Gross margin

 

81

%

 

 

 

 

 

 

 

 

 

 

85

%

Research and development

 

95,366

 

 

 

(26,607

)

 

 

(1,305

)

 

 

—

 

 

 

—

 

 

 

67,454

 

Sales and marketing

 

144,224

 

 

 

(20,750

)

 

 

(729

)

 

 

—

 

 

 

—

 

 

 

122,745

 

General and administrative

 

48,953

 

 

 

(14,632

)

 

 

(306

)

 

 

—

 

 

 

—

 

 

 

34,015

 

Amortization of other intangibles

 

4,776

 

 

 

—

 

 

 

—

 

 

 

(4,776

)

 

 

—

 

 

 

—

 

Income from operations

$

47,026

 

 

$

71,703

 

 

$

2,771

 

 

$

9,169

 

 

$

—

 

 

$

130,669

 

Operating margin

 

11

%

 

 

 

 

 

 

 

 

 

 

31

%

 

Three Months Ended September 30, 2023

 

GAAP

 

Share-based compensation

 

Employer payroll taxes on employee stock transactions

 

Amortization of intangibles

 

Transaction, restructuring, and other

 

Non-GAAP

Non-GAAP income from operations:

Cost of revenue

$

64,367

 

 

$

(7,197

)

 

$

(309

)

 

$

(3,900

)

 

$

—

 

 

$

52,961

 

Gross profit

 

287,333

 

 

 

7,197

 

 

 

309

 

 

 

3,900

 

 

 

—

 

 

 

298,739

 

Gross margin

 

82

%

 

 

 

 

 

 

 

 

 

 

85

%

Research and development

 

74,084

 

 

 

(18,177

)

 

 

(933

)

 

 

—

 

 

 

—

 

 

 

54,974

 

Sales and marketing

 

127,605

 

 

 

(18,877

)

 

 

(760

)

 

 

—

 

 

 

198

 

 

 

108,166

 

General and administrative

 

44,748

 

 

 

(13,707

)

 

 

(299

)

 

 

—

 

 

 

(1,578

)

 

 

29,164

 

Amortization of other intangibles

 

5,627

 

 

 

—

 

 

 

—

 

 

 

(5,627

)

 

 

—

 

 

 

—

 

Income from operations

$

35,269

 

 

$

57,958

 

 

$

2,301

 

 

$

9,527

 

 

$

1,380

 

 

$

106,435

 

Operating margin

 

10

%

 

 

 

 

 

 

 

 

 

 

30

%

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands, except per share data)

 

 

Three Months Ended September 30,

 

 

2024

 

 

 

2023

 

Non-GAAP net income:

 

 

 

Net income

$

44,008

 

 

$

35,809

 

Income tax expense

 

13,830

 

 

 

4,894

 

Non-GAAP effective cash tax

 

(30,856

)

 

 

(21,928

)

Interest income, net

 

(12,850

)

 

 

(8,509

)

Cash received from interest, net

 

12,848

 

 

 

8,980

 

Share-based compensation

 

71,703

 

 

 

57,958

 

Employer payroll taxes on employee stock transactions

 

2,771

 

 

 

2,301

 

Amortization of intangibles

 

9,169

 

 

 

9,527

 

Transaction, restructuring, and other

 

—

 

 

 

1,380

 

Loss on currency translation

 

2,038

 

 

 

3,075

 

Non-GAAP net income

$

112,661

 

 

$

93,487

 

 

 

 

 

Share count:

 

 

 

Weighted-average shares outstanding - basic

 

298,089

 

 

 

293,654

 

Weighted-average shares outstanding - diluted

 

301,373

 

 

 

297,794

 

 

 

 

 

Shares used in non-GAAP per share calculations:

 

 

 

Weighted-average shares outstanding - basic

 

298,089

 

 

 

293,654

 

Weighted-average shares outstanding - diluted

 

301,373

 

 

 

297,794

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

Net income per share - basic

$

0.15

 

 

$

0.12

 

Net income per share - diluted

$

0.15

 

 

$

0.12

 

Non-GAAP net income per share - basic

$

0.38

 

 

$

0.32

 

Non-GAAP net income per share - diluted

$

0.37

 

 

$

0.31

 

 

Three Months Ended September 30,

 

 

2024

 

 

 

2023

 

Free cash flow:

 

 

 

Net cash provided by operating activities

$

23,650

 

 

$

36,877

 

Purchase of property and equipment

 

(3,512

)

 

 

(2,750

)

Capitalized software additions

 

—

 

 

 

—

 

Free cash flow

$

20,138

 

 

$

34,127

 

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands, except percentages)

 

 

Six Months Ended September 30, 2024

 

GAAP

 

Share-based compensation

 

Employer payroll taxes on employee stock transactions

 

Amortization of intangibles

 

Transaction, restructuring, and other

 

Non-GAAP

Non-GAAP income from operations:

Cost of revenue

$

152,537

 

$

(17,444

)

 

$

(1,317

)

$

(8,772

)

 

$

—

 

$

125,004

 

Gross profit

 

664,812

 

 

 

17,444

 

 

 

1,317

 

 

 

8,772

 

 

 

—

 

 

 

692,345

 

Gross margin

 

81

%

 

 

 

 

 

 

 

 

 

 

85

%

Research and development

 

182,944

 

 

 

(48,187

)

 

 

(3,714

)

 

 

—

 

 

 

(3

)

 

 

131,040

 

Sales and marketing

 

289,330

 

 

 

(36,772

)

 

 

(2,233

)

 

 

—

 

 

 

 

 

250,325

 

General and administrative

 

93,931

 

 

 

(26,957

)

 

 

(916

)

 

 

—

 

 

 

3

 

 

 

66,061

 

Amortization of other intangibles

 

9,552

 

 

 

—

 

 

 

—

 

 

 

(9,552

)

 

 

—

 

 

 

—

 

Income from operations

$

89,055

 

 

$

129,360

 

 

$

8,180

 

 

$

18,324

 

 

$

—

 

 

$

244,919

 

Operating margin

 

11

%

 

 

 

 

 

 

 

 

 

 

30

%

 

Six Months Ended September 30, 2023

 

GAAP

 

Share-based compensation

 

Employer payroll taxes on employee stock transactions

 

Amortization of intangibles

 

Transaction, restructuring, and other

 

Non-GAAP

Non-GAAP income from operations:

Cost of revenue

$

126,711

 

 

$

(12,685

)

 

$

(1,232

)

 

$

(7,798

)

 

$

—

 

 

$

104,996

 

Gross profit

 

557,875

 

 

 

12,685

 

 

 

1,232

 

 

 

7,798

 

 

 

—

 

 

 

579,590

 

Gross margin

 

81

%

 

 

 

 

 

 

 

 

 

 

85

%

Research and development

 

140,366

 

 

 

(31,441

)

 

 

(3,195

)

 

 

—

 

 

 

—

 

 

 

105,730

 

Sales and marketing

 

252,722

 

 

 

(32,876

)

 

 

(2,312

)

 

 

—

 

 

 

198

 

 

 

217,732

 

General and administrative

 

83,843

 

 

 

(21,474

)

 

 

(765

)

 

 

—

 

 

 

(3,986

)

 

 

57,618

 

Amortization of other intangibles

 

11,387

 

 

 

—

 

 

 

—

 

 

 

(11,387

)

 

 

—

 

 

 

—

 

Income from operations

$

69,557

 

 

$

98,476

 

 

$

7,504

 

 

$

19,185

 

 

$

3,788

 

 

$

198,510

 

Operating margin

 

10

%

 

 

 

 

 

 

 

 

 

 

29

%

DYNATRACE, INC.

GAAP to Non-GAAP Reconciliations

(Unaudited - In thousands, except per share data)

 

 

Six Months Ended September 30,

 

 

2024

 

 

 

2023

 

Non-GAAP net income:

 

 

 

Net income

$

82,628

 

 

$

73,997

 

Income tax expense

 

27,979

 

 

 

8,392

 

Non-GAAP effective cash tax

 

(57,950

)

 

 

(40,470

)

Interest income, net

 

(25,625

)

 

 

(15,655

)

Cash received from interest, net

 

24,618

 

 

 

14,492

 

Share-based compensation

 

129,360

 

 

 

98,476

 

Employer payroll taxes on employee stock transactions

 

8,180

 

 

 

7,504

 

Amortization of intangibles

 

18,324

 

 

 

19,185

 

Transaction, restructuring, and other

 

—

 

 

 

3,788

 

Loss on currency translation

 

4,073

 

 

 

2,823

 

Non-GAAP net income

$

211,587

 

 

$

172,532

 

 

 

 

 

Share count:

 

 

 

Weighted-average shares outstanding - basic

 

297,736

 

 

 

292,504

 

Weighted-average shares outstanding - diluted

 

301,714

 

 

 

297,492

 

 

 

 

 

Shares used in non-GAAP per share calculations:

 

 

 

Weighted-average shares outstanding - basic

 

297,736

 

 

 

292,504

 

Weighted-average shares outstanding - diluted

 

301,714

 

 

 

297,492

 

 

 

 

 

Non-GAAP net income per share:

 

 

 

Net income per share - basic

$

0.28

 

 

$

0.25

 

Net income per share - diluted

$

0.27

 

 

$

0.25

 

Non-GAAP net income per share - basic

$

0.71

 

 

$

0.59

 

Non-GAAP net income per share - diluted

$

0.70

 

 

$

0.58

 

 

Six Months Ended September 30,

 

 

2024

 

 

 

2023

 

Free cash flow:

 

 

 

Net cash provided by operating activities

$

254,391

 

 

$

170,780

 

Purchase of property and equipment

 

(6,871

)

 

 

(13,017

)

Capitalized software additions

$

—

 

 

 

—

 

Free cash flow

$

247,520

 

 

$

157,763

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241107670760/en/

Investors: Noelle Faris VP, Investor Relations Noelle.Faris@dynatrace.com

Media Relations: Kristy Campbell VP, Brand and Communications Kristy.Campbell@dynatrace.com